SINGAPORE, Nov 28 (Reuters) - The dollar held steady versus the yen on Tuesday and held above a two-month low, with the near-term focus on a possible Senate vote on a U.S. tax plan later in the week.

Moves among major currencies were subdued, with market participants also waiting for a confirmation hearing on Tuesday for Federal Reserve chair nominee Jerome Powell, hoping for further clues on the outlook for the Fed’s monetary policy.

In remarks prepared for the hearing released by the Fed on Monday, Powell defended the U.S. central bank’s use of broad crisis-fighting powers.

Regarding the Fed’s current monetary policy, Powell said in the prepared remarks: “We expect interest rates to rise somewhat further and the size of our balance sheet to gradually shrink”.

The dollar held steady at 111.14 yen. On Monday, the dollar had set a two-month low of 110.85 yen, as investors were spooked by Japanese media reports saying that North Korea may be preparing for another missile launch.

Worries about potential delays in the implementation of U.S. tax cuts and the possibility of reform measures being weakened have weighed on the greenback in recent weeks.

At the same time, the yen has been supported as risk sentiment has faltered, partly due to weakness in Chinese equities in recent trading sessions.

“The China wobble is not helping global sentiment,” said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.

“China clamping down on...a lot of the shadow banking is a good thing for the long-term, but obviously, there’s going to be a bit of a meltdown in the short term,” Innes said.

China’s blue-chip CSI300 index touched a three-week low at one point on Tuesday, and was last down 0.7 percent. The index had tumbled nearly 3 percent last Thursday, its worst one-day loss in nearly 18 months.

Concerns that North Korea may be preparing another ballistic missile launch were also keeping traders cautious.

Since the low-yielding yen is often used as a funding currency for investment in riskier assets, it tends to be bought back when risk sentiment sours.

As a result, the yen has continued to behave as a safe-haven currency during times of heightened concerns over North Korea-related tensions, despite Japan’s geographical proximity to North Korea.

The latest bout of yen strength could prove to be temporary, said Roy Teo, investment strategist for LGT Bank in Singapore.

There hasn’t been any strong increase in bias toward yen strength in the FX options market, judging from the relatively stable moves in one-month dollar/yen risk reversals over the past couple of weeks, Teo said.

The dollar’s index against a basket of currencies held steady at 92.882, having set a two-month low of 92.496 on Monday.

The dollar has been hampered recently by uncertainty over the prospects for U.S. tax reform, including tax cuts.

A U.S. Senate Republican tax bill strongly backed by President Donald Trump faced potential opposition on Monday from two Republican lawmakers who could prevent the sweeping legislation from reaching the Senate floor.

Senators Ron Johnson and Bob Corker, both members of the Senate Budget Committee, said they could vote against the tax package at a Tuesday hearing that Republican leaders hoped would send the legislation to a full Senate vote as early as Thursday.

The euro held steady at $1.1903, after scaling a two-month peak at $1.1961 on Monday. (Reporting by Masayuki Kitano; Editing by Joseph Radford and Eric Meijer)